Stocks have surged, led by tech giants, facing overbought signals but historical data suggests positive returns.

From Nasdaq Inc.: 2024-06-20 12:50:00

Wall Street is following historical patterns as stocks bottomed in October 2022 amid record high inflation. Mega-cap tech companies like Nvidia, Microsoft, and Apple have been leading the market, with the Nasdaq 100 up over 30% in the past year. However, not all investors have benefited, with NAAIM reporting low market allocations.

The market faces bearish arguments, such as extreme overbought signals based on RSI data for the Nasdaq 100. Despite this, historical data suggests positive returns a month later in such scenarios. Additionally, with a 94% chance of a rate cut in December and a strong track record in July, the bull market may have more room to run.

Concerns about poor breadth and high valuations are being raised, but signs point to a possible turnaround. The Direxion Nasdaq 100 Equal Weight Index ETF is showing strength, and while top stocks have high P/E ratios, others remain undervalued. Overall, data indicates the bull market could continue its upward trend.

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Read more at Nasdaq Inc.: Have Stocks Run too Far, Too Fast? (5 Clues)